Are auditors and other IRS agents allowed to get a ride from a ridesharing service–or even a friend or family member–to a taxpayer’s home or place of business? It depends on whether doing so violates the taxpayer’s privacy rights.
That’s the conclusion of the IRS Office of the Chief Counsel in a recent legal opinion. While the memorandum doesn’t change the law, it does offer some clarity for taxpayers.
The only times an auditor or IRS agent can visit a taxpayer’s home or place of business is when that taxpayer is being examined or criminally investigated, or is facing special collection circumstances. In any of these cases, it’s understandable that the taxpayer would want to protect their privacy.
That can get tricky when the auditor or IRS agent needs to hitch a ride.
“Providing the taxpayer’s address or identity to a third-party transportation provider, coupled with the agent’s job description and employing agency, may indirectly and impermissibly disclose that the taxpayer is subject to an exam,” states the opinion. “While there is no absolute bar to using alternative methods of transportation, agents should be sure that no direct or indirect disclosure is made.”
Riding public transportation or being dropped off some distance away from the taxpayer’s actual location may be enough. And simply taking a taxi, Uber, Lyft, or other car service to travel to the taxpayer’s location may be OK, too, as long as the auditor or agent is incognito—meaning, they aren’t carrying or wearing anything that indicates that they work for the IRS.
But, because this is a grey area, don’t be afraid to question whether your privacy has been violated by an IRS visit. The agency promises taxpayers a right to privacy and specifically states that tax administration investigations can only be disclosed to necessary third parties. Your friendly neighborhood Uber driver isn’t among those parties. For questions, feel free to contact us.